Aker Yards and Alstom today announced plans to "join forces in shipbuilding and create together one of the world leaders in this industry, focused on high value added ships, including world class cruise ships."

Under the plan, the Alstom Chantiers de l'Atlantique yards in Saint-Nazaire and Lorient, France, would be spun off into a new company. Aker Yards would own 75 percent of this company, with Alstom committing itself to retaining a 25 percent stake until 2010.

The transaction would be carried out as a "sale of assets" from Chantiers de l'Atlantique to Aker Yards.

The LNG tankers under construction at Saint-Nazaire are not a part of deal. They would be completed by the new company as a subcontractor to Alstom. The rest of the current Chantiers de l'Atlantique order book, mainly consisting of four cruise vessels would be included in the transaction.

Aker Yards would pay Euros 50 million ($59.2 million) for its initial 75 percent of the new company. Depending on the financial performance, the remaining 25 percent would be sold to Aker Yards for up to Euros 125 million ($148 million) in 2010.

According to a joint statement from Aker Yards and Alstom," the new company would be adequately funded to ensure the ability to independently finance its future growth. An estimated amount of Euros 350 million ($414.5 million)would be injected by Alstom into the newly formed company. This amount would notably cover the anticipated increase in working capital requirements from the current negative situation to an average of Euros 100 million ($118 million) for the new company."

"The proposed transaction," says the statement, "would be subject to a number of conditions, including finalization of the agreement between the parties, the effective setting-up of the new company, the requisite financing for the new company's activities, the authorization of the European authorities, the information/ consultation of the work councils, confirmatory due diligence and other relevant conditions. It is expected to be concluded by the end of March 2006.

The statement says that the "transaction would enable continuity in management and the actions taken as part of the 'Marine 2010' performance improvement and cost reduction program already under implementation in Alstom Marine. The transaction would have no direct impact on employment."

As part of Aker Yards, says the statement, "the new company would benefit from a broadened product range and strong industrial synergies. Aker Yards has 13 yards in 5 countries in which it has demonstrated its ability to implement synergies. It would be in a position to address the strong growth which is expected in this market."

The statement says that Aker Yards would also be in a position to fully leverage Chantiers de l'Atlantique's large industrial capacity in cruise ships and naval vessels in Saint-Nazaire. The shipyard is ideally positioned to handle the construction of very large ships and is able to respond to a cruise market which demands vessels of ever-increasing size.

Patrick Kron, Chairman and CEO of Alstom, said: "Putting together Aker Yards and ALSTOM Marine would create a champion on the market of high-valued ships, notably of cruise ships. We would be proud to be part of its development in the coming years."

Karl Erik Kjelstad, President & CEO of Aker Yards states in a comment: "By joining the forces of Chantiers de l'Atlantique and Aker Yards, we can create a unique position in the shipbuilding industry, ready to meet the ever increasing needs of tomorrows' demanding cruise passengers. "

Patrick Boissier, President of Alstom Marine, declared "The yard in Saint-Nazaire has a long tradition in building complex and specialized vessels, with state of the art technology, modern facilities and a very competent staff. I do believe that a strong and fruitful combination between Chantiers de l'Atlantique and Aker Yards can be achieved."